The fragmentation dynamics of single water droplets from laser irradiation is studied with megahertz frame rate x-ray microscopy. Owed to the nearly refraction-free and penetrating imaging technique, we could look into the interior of the droplet and reveal that two mechanisms are responsible for the initial explosive fragmentation of the droplet. First, reflection and diffraction of the laser beam at the droplet interface result in the formation of laser ray caustics that lead to non-homogeneous heating of the droplet, locally above the critical temperature. Second, homogeneous cavitation in the droplet that is likely caused from shockwaves reflected as tension waves at the acoustic soft boundaries of the droplet. Further atomization occurs in three stages, first a fine sub-micrometer sized mist forms on the side of the droplet posterior to laser incidence, then micrometer sized droplets are expelled from the rim of an expanding liquid sheet, and finally into droplets of larger size through hole and ligament formation in the thinning liquid sheet where ligaments pinch off.